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Three Shares with Inflation-Beating Dividend Yields

StockMarketBoardLast month, the Department of Statistics announced that the Consumer Price Index (CPI), or more popularly known as the inflation figure, was at 3.5% in March. That was significantly better than February’s 4.9% but with the interest rates we are getting in our CPF accounts (2.5%) and savings deposits (below 0.1%), inflation is still getting the better of us.

Shares with dividend yields better than the inflation rate can help us come out ahead and protect or even grow our capital. With March’s inflation standing at 3.5%, let’s take a look at three shares with yields better than that.

1) Kingsmen Creatives (SGX: 5MZ)

Kingsmen operates in the MICE (Meetings, Incentives, Conferencing and Exhibitions) industry. They help design, manufacture and put-in-place installations for retail stores, museums, theme parks, trade shows, exhibitions etc.

Though relatively tiny in the local stock market with a market cap of around S$180m, the company’s clientele includes globally recognised brands like Tiffany & Co., BMW, Hugo Boss, Formula 1 Singapore Grand Prix, Universal Studios Singapore and many more.

Its shares are selling for S$0.96 apiece at a price-earnings ratio of 10.7 and sport a dividend yield of 4.2% based on last year’s annual pay-out of $0.04 per share. The company has either maintained or raised its dividends every year starting from 2005’s pay-out of S$0.01.

2) Riverstone (SGX: AP4)

Those in the healthcare or electronics industry might find this company familiar because they manufacture an indispensable product that’s needed in both industries – latex and nitrile gloves. With two manufacturing plants in Malaysia, and one each in Thailand and China, the glove maker can produce up to 3.1b pairs each year.

Riverstone has been rewarding shareholders handsomely with growing dividend checks. The company’s pay-out has increased by more than two-fold from 2003’s 1.13 cents per share to last year’s 2.4 cents.

At a price of S$0.47, shares of the glove maker are selling for 10.7 times its last 12 months’ earnings and would fetch a dividend yield of 5.1% based on last year’s pay-out.

3) SIA Engineering (SGX: S59)

SIA Engineering maintains, repairs and overhauls aircrafts for a living. The engineering-related company, a subsidiary of Singapore’s flagship airline, the Singapore Airlines (SGX: C6U), provides its services to more than 85 airlines around the world.

Excluding special dividends, SIA Engineering’s dividends have been on a general upward trend, growing by almost four times from 2003’s 4.5 cents per share to last year’s 21 cents. The company’s shares trades at $5.29 with a PE of 21.6 and a dividend yield of 4%.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chong Ser Jing owns shares in Kingsmen Creatives.